International Journal of Law
International Journal of Law
International Journal of Law
Vol. 2, Issue 4 (2016)

DE facto partnership under the OHADA uniform Act

Dr. Victorine Kamgoui Kuitche

Moral personalities seem to gain grounds in law today, but loses at the practical level. While the personification of companies presents a progress, many of African entrepreneurs are out of the sphere. This situation usually results from, ignorance or disobedience. Those involve are not aware of the formality of registration [1]. For this reason, many entrepreneurs find themselves in uncomfortable situations. Their comportment towards each other results to their treatment as a regulated company. That is where de facto partnership intervenes.

According to article 4 of the Uniform Act of OHADA [2] relative to Commercial Companies and Economic Interest Groups, a company can be created by two or more people who accept through a contract to allocate to an activity, goods in cash, in kind, with aim to share the benefits that might result from it. The associates also engage themselves to share the deficit under the conditions provided by the present Uniform Act [3]. For such company to have a judicial life, it has to fulfill certain conditions, such as, the incorporation in the Trade and Personal Property credit Register (TPPR).

Moreover, the commercial character of a company is recognized either through its form or its object. The uniform act considers four forms of companies as commercial. They include; limited liability company (SARL) [4], limited joint stock company (SA) [5], “Société en Commandite Simple” (SCS) and “Société en Noms Collective” (SNC) [6]. Any commercial companies found in one of the member states of OHADA must respect the form of one of these companies. Otherwise, they will be under the regime of nullity.

The immoral effects of nullity, has caused the case law to remedy the situation to compensate good faith partners and third parties by conceiving of the theory of de facto partnership. It is defined by article 864 of the uniform act relating to commercial companies as “a situation whereby, two or more physical or moral persons behave as associates without constituting any of the legally recognized form of company”.

The interpretation of this definition shows that de facto partnership is deduced from comportments, that is, it is a situation where two or more persons behave as associates, without expressing the will of forming a company [7]. De facto partnership is the fruit of behaviors between persons (concubines, parents, and friends). The legal qualification is done by the court or by the tax administration. This qualification is always done in cases where the partners officially had no legal relations between them. It can happen that, they were openly linked by a contract and the qualification of De facto partnership comes to establish the progressive transformation of their initial contractual link. that is why MM. Viandier and Caussain defines the facto partnership as “ a subsidiary instrument whose utility and efficiency is seen only when the relations between the parties do not dwell in a real, perfect and well defined contract” [8]. This qualification intervenes generally at the occurrence of litigation either between associate or with third parties. The qualification can also be evoked out of court, by tax administration in its desire to submit behaviors to the tax regime of De facto partnership.

De facto partnership is under the regime of nullity, but the legislator finds the interest in its regulation in the uniform act. This regulation shows the interest with which the legislator wants to protect partners to an agreement and also third parties who contract with them, even in the informal sector. The regulation of De facto partnership highlights the OHADA legislator’s worry to establish equality between parties to a contract and also to fight for the interest of good faith third parties. The questions we shall answer in this piece of work concerns the qualification of de facto partnership, and the legal rules that are applied it. To answer all these questions we shall examine the qualification of De facto partnership (I) and discuss its judicial regime (II).
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How to cite this article:
Dr. Victorine Kamgoui Kuitche. DE facto partnership under the OHADA uniform Act. International Journal of Law, Volume 2, Issue 4, 2016, Pages 34-41
International Journal of Law